This type of organisational structure is most suitable when the size of the organisation is large, has diversified activities and operations require a high degree of specialisation.

Functional structure

The correct answer is option 3- functional structure.

Grouping of jobs of similar nature under functional and organising these major functions as separate departments creates a functional structure. All departments report to a coordinating head. A functional structure is an organisational design that groups similar or related jobs together.

Suitability of Functional Structure: It is most suitable when the size of the organisation is large, has a diversified activities and operations require a high degree of specialisation.